EF.IO/3/05 22 May 2005

Transcription

1 Organization for Security and Co-operation in Europe Secretariat EF.IO/3/5 May 5 ENGLISH only Conference Services Please find attached the presentation by Ms. Vanessa Mitchell-Thomson, Principal Economist, EBRD, delivered to the Session of the Review of the implementation of OSCE commitments in the economic and environmental dimension focusing on Integration, Trade and Transport of the 13 th OSCE Economic Forum, Prague, 3-7 May 5.

2 EBRD Transition indicators: some findings on trade and infrastructure Vanessa Mitchell-Thomson EBRD Transition Indicators Qualitative country-by-country indicators Scale: 1 = little/no progress; + = standards of advanced market economy First phase reforms: small-scale privatisation, price and trade liberalisation Second phase reforms concern institutional development: large-scale privatisation, governance, competition, infrastructure, and financial institutions Transition achievements EU accession is a milestone, but not the end of transition Average transition score for each country,.5 1

3 Most progress in financial institutions and infrastructure Number of upgrades * 8 Governance Competition Small-scale Securities Large-scale Overall Banking and enterprise policy privatisation markets and privatisation infrastructure reform and restructuring non-bank reform interest rate financial liberalisation institutions * No change was reported in price liberalisation, trade and forex systems Trade integration Trade integration into the world economy proceeding but not complete Regional cooperation especially needed in landlocked CIS to lower transit costs and increase regional trade Reforms in trade liberalisation: - among the first phase of reforms which are almost complete - liberal policies pervasive, except some SEE / CIS Transition score,.5 Slovakia Kyrgyzstan

4 Increased openness to trade and redirection to world markets 5 Accession - 8 SEE + CIS Changes in trade (%), Trade within the sub-region Trade outside the sub-region Less trade than economic models predict Factors explaining the gap transit cost (borders, infrastructure) policies and institutions break-up of former Yugoslavia Ratio of actual to predicted trade (% Basic model Extended model (GDP, distance, (borders, infrastructure, X-rate volatility) policies, institutions) Accession - 8 SEE + CIS Infrastructure Infrastructure reform is key to transition Supports enterprise performance Facilitates regional cooperation and trade Efficient infrastructure services depend on: Effective regulation Private sector participation (PSP) Competition 3

5 Infrastructure reforms much slower: - second phase institutional reforms - commercialisation, tariff reform + better regulation take time Transition score,.5 Slovakia Kyrgyzstan Low and distorted tariffs Ratio (per cent) 1 8 Electricity USc / kwh 1 8 Residential to non-residential tariff ratio (left axis) Residential tariff (right axis) Uneven regulatory effectiveness reflecting weak institutions generally Electricity Regulatory score ( = highest) Independence Transparency Accountability

6 Uneven level of PSP: by country = Full; = Substantial; 3 = Noteworthy; = Small and 1 = None Uneven level of PSP: by sector Mobile Urban Fixed-line Electricity Electricity Gas Railways District Ports and Water telecom transport telecom generation distribution transmission heating airports and distribution 5 = Full; = Substantial; 3 = Noteworthy; = Small and 1 = None Roads Why PSP: better performance Some anecdotal evidence, 5,, 3,, 1, Productivity: rail 1 3 Number of staff (left axis) Profits US$ hundreds, (left axis) Labour productivity (right axis) In per cent Efficiency: power 1 3 Cash collection rate Energy losses 5

7 Competition as important as ownership Telecoms in Caucasus Mobile subscribers per inhabitants (monopoly) (competitive) (competitive) Conclusion trade integration Although integration has been substantial, transition countries still trade less than what models would predict Gap between actual and potential trade is almost entirely explained by geographical constraints, border controls, restrictive policies and weak institutions, especially in the CIS Overcoming constraints to transit and transport is therefore a key challenge, particularly in Central Asia Conclusion - infrastructure Competition, regulation and private sector participation (PSP) are key factors for good infrastructure performance Many countries have found it hard to establish effective regulatory agencies Uneven level of PSP by country and sector, although there is some evidence that PSP leads to better performance